The market is rebounding after a lower opening this morning as Wall Street has shrugged off some bad economic news and is focusing on keeping the Dow above 8,000. Aside from Monday’s dramatic 680 point debacle, the Dow had been on a nice winning streak. This has raised the bulls hopes that some stability might be returning to Wall Street. However, despite today’s turnaround there are still quite a few stocks heading lower.

Chesapeake Energy (CHK, $13.93, down $0.32) continues to be a huge winner for us and hit a low of $13.43 earlier this morning. The December 17.50 puts (CHKXW, $4.00, up $0.20) have traded as high as $4.50. Many of you got in at $1.65-$2.65 and we have our stop at $3.50. Go ahead and raise it to $3.70.

Potash (POT, $53.08, down $2.02) has had one of its legs taken off on the way down from $240 and there other leg is broken. The market is leaning heavy on the stock and the December 50 puts (PVZXJ, $3.20, up $0.50) and the December 40 puts (PVZXH, $0.80, up $0.05) are off to a good start.

Research In Motion (RIMM, $37.65, up $0.33) hit a low of $35 but is rebounding. Like I mentioned earlier, the first half-hour of trading would be dicey for the stock. Those December puts (RUPXG, $2.50, down $0.70) I told you not to chase on the pre-earnings announcement opened at $4.05 and now look at them. A lot of novice option traders will “chase” this type of news as soon as the market opens and find themselves 50% in the hole 30 minutes later. RIMM may collapse from here but I wanted to point this out because the market doesn’t care about your experience level.

And yes, I did stay at a Holiday Inn Express last night…

Rick Rouse